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The Effects of Equity Incentives on Corporate Performance in China

Author

Listed:
  • Rongqiu Zhu
  • Haslindar Ibrahim

Abstract

For modern companies, equity incentives are used as a tool to address agency problems. This study examines the long-term impact of equity incentives on corporate performance using data from A-share listed companies in China from 2010 to 2022. The findings suggest that equity incentives can enhance corporate performance for four years after implementation, with the strongest effect observed in the second year. Additionally, there is no significant difference in the impact of equity incentives on corporate performance between state-owned enterprises (SOEs) and non-state-owned enterprises (NSOEs) in China.

Suggested Citation

  • Rongqiu Zhu & Haslindar Ibrahim, 2024. "The Effects of Equity Incentives on Corporate Performance in China," Business Management and Strategy, Macrothink Institute, vol. 15(2), pages 81-97, December.
    • Handle: RePEc:mth:bmsmti:v:15:y:2024:i:2:p:81-97
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    References listed on IDEAS

    as
    1. Bebchuk, Lucian A. & Fried, Jesse M., 2003. "Executive Compensation as an Agency Problem," Berkeley Olin Program in Law & Economics, Working Paper Series qt81q3136r, Berkeley Olin Program in Law & Economics.
    2. Lucian Arye Bebchuk & Jesse M. Fried, 2003. "Executive Compensation as an Agency Problem," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 71-92, Summer.
    3. Jensen, Michael C. & Meckling, William H., 2008. "Theory of the firm: managerial behavior, agency costs and ownership structure," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 48(2), April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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